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Has steel become a product of confusion?

'We have seen too many industries like steel and manufacturing dwindle,' Jay Rockefeller said. |
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But Larry Lasoff, counsel to the trade association Specialty Steel Industry of North America, said the department’s concerns were overblown. “At no time during the buildup, during the war in Iraq and beyond, was there ever a capacity issue associated with armor plate,” he said. The Pentagon, he noted, is allowed to waive certain requirements in the event of a supply shortage.

“To have to change the whole business model permanently when the authority and flexibility already exist — there’s just no justification for it,” Lasoff said. The Federal Register document, though, called such waivers time consuming and inefficient.

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Lasoff also said he believes the issue represents a larger shift at the Pentagon toward a global business model — a trend he’s concerned could one day affect the procurement of other types of metals. The approach “puts the supply chain at risk,” he said, adding that protections against foreign competition can drive U.S. steelmakers to develop new capabilities.

One example is Nucor. The company, one of the largest steelmakers in the United States, started producing armor plate two years ago — after the 2008 financial crisis left many of its workers idle.

“We didn’t lay off anyone, even though there was a drop in demand,” said Eileen Bradner, Nucor’s senior director and counsel for federal government affairs. “We told employees to work with each other and get ready to make new grades of steel so that when the economy does return, we could emerge stronger.”

Soon, steelmakers at a plant in Decatur, Ala., learned to manufacture the military-grade plate. “They’re now supplying it for the MRAP,” Bradner said, adding that a Nucor plant in North Carolina is planning to follow.

This hasn’t gone unnoticed at the Pentagon.

“The department is encouraged,” Irwin said, “by what we understand to be an increase over the past three years in both the number of United States specialty metal steel manufacturers and in the total production capacity for armor steel plate.”